Hungary Adopts Tax On Pipelines And Cables

by Ulrika Lomas, Tax-News.com, Brussels

30 November 2012

Hungary's parliament has adopted a bill levying a length-based tax on the owners of public utility pipelines and cables.

The proposed tax covers "water supply, sewage and rainwater drainage in municipal areas," as well as pipelines and cables for gas, district heating, electricity, and telecommunications in municipal and non-municipal areas. The tax may also apply to private property "in exceptional cases."

According to a statement issued by the Ministry for National Economy, the tax will be calculated by multiplying the length of a pipeline or cable in meters in municipal areas by HUF125 (USD0.58), although parallel lines serving an identical purpose will be counted only once.

Pipelines and cables serving exclusively the areas in which they are laid will be exempt from the tax, and the tax will not be applicable to pipelines and cables which branch off from the main system and connect only to consumers at a particular site. The state and local governments are also exempt.

Owners of telecommunication cables are entitled to tax relief depending on the length of their lines. The statement advises that "the longer the cable the smaller the utilizable tax relief."